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Toyota faces rising new car production costs

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A photo of cars coming off two production lines at a Toyota plant.

A photo: Toshifumi Kitamura/AFP (Getty Images)

Toyota Won’t Force Suppliers to Cut Parts Costs, Boeing Workers Agree strike, as well as US automakers are struggling to fill vacancies. All this and more in morning shift as of July 25, 2022.

1st gear: Toyota

Eeverything is getting bigger expensive now due to inflation or so economy people tell me. Tit’s not just about me and you, how autoproducers also feel disadvantaged. Reuters reports that Toyota has decided not to ask its suppliers to cut prices as it struggles with rising construction costs.

According to Reuters, despite the presence of agreements to reduce the cost of components between July and September this year. that Toyota did not contact its suppliers continue the deal later in the year:

Toyota Motor Corp will not unilaterally demand price cuts from its suppliers for the second half of the fiscal year and is also considering supporting their energy bills, an executive said on Monday.

The move bolsters an attempt by the world’s largest automaker by sales volume to shoulder much of the burden suppliers face as global supply chain challenges continue and energy costs skyrocket.

Like other automakers, Toyota has been hit by a global semiconductor shortage and COVID-19-related restrictions that have led to repeated cuts in vehicle production and disappointed suppliers.

Toyota initially sent out a price cut request to some suppliers for the July-September period, but the company decided not to make a request for the October-March period because its production plan has not yet stabilized, said Kazunari Kumakura, Toyota’s purchasing department. team leader. He also did not make a request for the period from April to June.

The firm said it is exploring ways to support its suppliers as energy and fuel prices continue to rise.

According to Toyota, supply chain problems and rising prices raw materials beats their production costs. The firm warned earlier this year that its material costs could “more than double” this year to 1.45 trillion yen ($10.64 billion).

This sky-high cost led the firm to initially ask suppliers to lower their prices between July and September of this year. But now it looks like the firm will take a hit on annual profits instead. Either that, or the cost of a new Toyota is about to skyrocket.

2nd gear: 2500 Boeing workers leave on the hit

Boeing is facing a strike at three of its US plants after workers voted against a new contract offered by the aircraft maker. According to the Associated Pressabout 2,500 workers have been on strike since August 1. at Boeing manufacturing sites in St. Charles, St. Louis and Muscoot counties, Illinois.

The District 837 International Association of Machinists and Aerospace Workers union said in a statement: “We cannot accept a contract that is not fair and equitable as this company continues to earn billions of dollars annually on the backs of our hardworking members.”

In response to the proposed strike, the AP reported that Boeing had a “contingency plan” in place “to maintain continuity of operations.” According to the AP:

A Boeing spokesman said the company’s contract offer includes competitive allowances and a generous retirement plan that sees Boeing pay employees’ contributions to their pension plan up to 10% of their wages.

Boeing is expected to provide an update on its finances this week when it releases its next quarterly earnings report on Wednesday. Earlier this year, Boeing posted a $1.2 billion loss in the first quarter, but just last week, the company announced that Delta Air Lines had ordered 100 of its 737 aircraft.

3rd gear: automakers brace for recession

American automakers GM and Ford now face the unenviable task of convincing investors that all is well. According to Reutersthe country’s two largest auto companies are currently working to reassure investors that they can weather the “recession without going negative.”

The site reports that analysts are cutting production estimates and share price targets for both firms as they tackle the ongoing Covid-19 pandemic, supply chain issues and a “gloomy outlook for the global economy.”

However, both automakers appear to be well positioned to deal with any further challenges they may face on the global stage. Unlike the 2008 recession, demand for new cars remains high.. According to Reuters:

Some analysts say the recession could be moderate and car demand could recover faster than in the past. One big difference from past slowdowns is that US GM and Ford dealers are not sitting on large stocks of unsold vehicles that must be lowered to sell.

We believe that in the multi-year horizon the situation is developing more positively.” Bank of America analyst John Murphy wrote in a note citing tight inventories and pent-up demand from consumers who have been delaying buying as cars have become scarce and expensive.

Despite the challenges both firms are facing, GM said earlier this month that it expects net income from $1.6 billion to $1.9 billion, while Ford forecasts full-year operating income can be from 11.5 to 12.5 billion dollars.

4th Gear: Tesla opens Supercharger network

One of Tesla’s biggest benefits is access to a network of public Supercharger fast charging stations. This is undoubtedly a great service that makes life a little easier with a Tesla than with other electric vehicles. Tuehey, only if you can see through all their other flaws.

Hoh, this network of over 1,200 charging points in 50 states could be open to regular EV drivers across America. According to Wall Street JournalTesla is trying to use government funding to build more electric vehicle charging points and open up part of its Supercharger network to electric vehicles made by other manufacturers after previous White House announcement this month. WSJ reports:

The EV market leader is claiming a portion of billions of federal and state dollars to be raffled off in the coming years as the Biden administration, automakers and many states scramble to speed up construction of fast chargers along highways to reassure drivers. that they can travel without fear of losing power.

Tesla already has a national network of fast chargers for its own drivers, but they are not available for other vehicle types in the US. During the year, the company said it plans to open its US network to others, though details about the timing and whether it will open existing stations or new ones will be scarce. Recent regulations and other documents indicate that the company is applying for government funding, which, if granted, would require other electric vehicle manufacturers to access the grid.

The firm has already received $6.4 million to build charging stations in rural California. White House Document Show that it will start building public charging stations for other electric vehicles by the end of the year.

5th Mechanism: U.S. auto factories can’t find enough workers

Rising travel costs and declining unemployment are making it harder for U.S. automakers to fill vacancies at factories across the country. Currently, new report from Automotive News described the steps companies are taking to attract new employees.

According to automotive news:

Automakers are being forced to raise starting wages in these once coveted jobs, only to get ahead of other employers like Amazon warehouses and fast food franchises, as well as their own suppliers and manufacturers in other industries.

Labor shortages have made it harder for automakers to restock depleted dealer inventory and has shown some of the disadvantages of building factories in remote locations.

“We’re looking under the rocks for people who could go to work right now,” said Alex Sadler, who specializes in training and development for the Tennessee Valley Authority’s economic development division and has worked on developments for several automakers, most recently Ford Motor. Blue Oval City project by Co.

Steps taken to try to lure workers back to car factories include helping with fares, raising starting wages and even adding bonuses for long-term workers. All of this is happening as firms try to increase output by expanding and replacing workers who have left in recent years.

Reverse: Nasty Wfrom ai to gabout

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